Succession planning is an essential business activity for dealer owners, whether you own an auto or truck dealership, implement dealership or heavy equipment dealership. This strategic approach is essential to estate planning and helps ensure sustainable business continuity after you’ve left the dealership business, be that through retirement, an unexpected life event or even death. A documented, approved and well-understood plan increases the likelihood the transition will go to the successor you choose and happen how you want.

1. Build your team. To start building out your succession plan, you must first create a planning team. This team might include your CPA, financial planner, estate planner or business attorney, insurance representative, any necessary business counselors or advisors, and relevant family members and/or key management, including your chosen successor, once you’ve determined who this will be. Your team might evolve to include (or exclude) certain individuals over time.
2. Develop your crisis plan. Next, you must develop a crisis plan. Your crisis plan should outline next steps should something happen to you, the dealership owner, unexpectedly. It assigns a management team and outlines responsibilities, and it also includes pertinent documents like loan information and other financial resources.
3. Align plans. You must also align your estate plan with your succession plan. Oftentimes, great estate planning doesn’t equal great succession planning. For example, your estate plan may give ownership of your business to all of your children equally—even those who aren’t involved or interested in the business. This could be detrimental to succession planning.
4. Start training. By this point in the process, you’ve likely identified your successor or your plans to sell. For a successor, start the training process and integrate them into dealership operations. If they’re already involved, gradually expand their responsibilities with the goal of preparing them to take over entirely. You want them to understand the ins and outs of your business so they’re able to carry on the relationships you’ve built with employees, the community, the factory and any relevant third parties.
5. Document everything. Documentation is key to every step of this planning process and beyond. To give your successor a guidepost for business success, it’s helpful to document a strategy they can follow even years after you’ve exited. Your years of experience will greatly inform this strategy and can help you feel more confident in the transition.